Options and pre-emption rights

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A ‘call option’ is a contractual right to require the owner of land to sell it to the option holder (ie the option holder can ‘call’ for the land).

A ‘put option’ is a contractual right for the owner of land to require another person to buy or accept a transfer of it (the option holder can choose to ‘put’ the land on the party subject to the option).

Both types of option create unilateral rights. There is no obligation on the option holder to exercise the option, but if they do so then the other party is bound to perform their part of the bargain.

Options are contracts for the sale of land within Law of Property (Miscellaneous Provisions) Act 1989, s 2 (LP(MP)A 1989). They must:

  1. •

    be in writing

  2. •

    contain or incorporate all of the terms expressly agreed between the parties, and

  3. •

    be signed by or on behalf of each party

The option holder’s notice of exercise is simply a mechanism to trigger the obligation to sell or buy the land. The option holder has a unilateral

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Insolvency, declarations of trust, loan agreements, artificial asset protection, sham transactions, transactions defrauding creditors, interspousal asset transfers, change of position defence and wife’s entitlement to share of husband’s assets (Sayers v Dixon)

Restructuring & Insolvency analysis: The court held that six declarations of trust (DoTs) executed by the transferor (Mr Dixon) in favour of his wife (Mrs Dixon) constituted transactions defrauding his creditors within the meaning of section 423 of the Insolvency Act 1986 (IA 1986) and that two of them, purporting to transfer all his future assets and income to Mrs Dixon, along with an accompanying loan agreement, were shams which were void and ineffective. It set aside the DoTs and ordered Mrs Dixon to restore the value of three transferred properties (which had been converted into £551,589 cash) to Mr Dixon’s trustees in bankruptcy (trustees) together with interest of £101,726. It also ordered an account to be taken of the funds that had been transferred to Mrs Dixon or on her behalf by Mr Dixon over the seven years between the date of the DoTs and his bankruptcy. The court dismissed Mrs Dixon’s defence of change of position to the trustees’ claim for restoration, finding that even if such a defence were generally available (which is unclear), she had not acted in good faith and could not rely on it. It also dismissed her defence that, having been married to Mr Dixon for many years, she was entitled to half his assets and/or an entitlement to a share of them by virtue of a right to be maintained. Written by Jonathan Lopian, barrister at New Square Chambers, who acted for the successful claimants.

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HM Land Registry updates Practice Guide 8

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The Building Safety Levy (England) Regulations—a quick guide

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